Dirt Diggers Digest Guide to Strategic Corporate Research
By Philip Mattera
Director of the Corporate Research Project and Publisher of the Dirt Diggers Digest
Table of Contents
PART IV. INDUSTRY-SPECIFIC SOURCES
Ongoing problems with corporate crime and misbehavior make it essential for progressive activists to know how to gather information on the way business operates. These days, all of us need to be watchdogs against the excesses of corporate power.
This manual is designed to help researchers and activists gather essential information on any type of U.S.-based company -- whether small or large, privately held or publicly traded -- as well as foreign companies operating in the United States. It also provides a guide to the key information sources for all major U.S. industries.
Most of the sources listed are found online, but some printed materials are included as well. Wherever possible, the recommended resources are free sites on the web, but the manual also points out where certain valuable information can be found only on pay websites and subscription services, including some that may be available through public library or academic library systems.
The resources listed here are all, in one way or another, part of the public record. If you want to know about original investigative techniques, you will have to look elsewhere. The manual, nonetheless, will introduce you to many lesser known public sources that contain information that may feel as if it is secret.
The manual is divided into four parts. The first covers leading sources of basic information on companies of all kinds. Part II focuses on information sources relating to the key relationships every company must have in order to function. Part III shows you how to gather information about a company’s accountability record, i.e., its track record on issues such as environmental compliance, labor relations, consumer protection and political influence. Part IV consists of the following categories of sources on all major industries: trade associations, trade publications, unions, watchdog groups and regulatory agencies. Together, these sections will help you find all the basic information needed to support efforts to get companies to do the right thing.
The biggest challenge in most corporate research projects is not a shortage of information, but rather too much of it. The key to efficient research is figuring out how to sort through the barrage of data and zero in on what is important. An essential part of this is knowing where to begin. This section provides a list of the best starting points for getting a basic understanding of a company, including its finances, its operations, its executives and its history.
Although its free version has cut back on the amount of information it provides, D&B Hoover’s is a useful place to begin when trying to get a basic picture of a company. It offers capsule descriptions of thousands of companies based in the United States and abroad. The capsules include the following information:
- name, address, phone number and website
- ranking in lists of largest publicly traded or privately held companies
- brief overview of its operations
- top competitors
D&B Hoover’s also sells subscriptions that give users access to additional information, including more extensive narrative profiles, more details on products and subsidiaries, and biographical information about top executives and directors. Note: A version of the longer Hoover company descriptions can be found on the subscription service Nexis.
Yahoo operates one of the multitude of investor information sites on the web. You begin by entering the ticker symbol (which it can help you look up) and are then shown a screen with the most recent stock price and a list of news headlines. You can think click on various links within categories such as News & Info, Company (which includes a basic profile) and Financials.
Mergent Inc. took over the publication of Moody’s Manuals, which in the pre-Internet age were one of the prime sources for basic descriptive, historical and financial information about publicly traded companies, including a useful summary of major acquisitions and a list of subsidiaries. These hefty annual volumes, some of which date back to the early 1900s may still be available in larger libraries for historical research. The online version of Mergent, a subscription service available through academic libraries, contains financial details on tens of thousands of U.S. and foreign corporations.
International Directory of Company Histories
For more than a decade, St. James Press published collections of narrative profiles of thousands of major companies in a series of volumes known as the International Directory of Company Histories. It can be found in larger reference libraries. An electronic version of the content is made available by Gale Cengage Learning in its web-based product called Gale Business Insights: Global (see below).
Gale Business Insights: Global
Business Insights is an amalgamation of information from a variety of printed and online reference works. This resource is produced by Gale Cengage Learning and is marketed mainly to larger public and academic libraries, which often provide remote as well as on-site access for authorized users. The features include:
- basic data (address, line of business, top officers, etc.)
- company history and/or chronology
- financial and market share data
- product names
- links to news articles about the company
- links to Wall Street analyst reports about the company
- links to relevant trade associations
Lexis-Nexis Company Dossiers
LexisNexis Academic, available in many university libraries, contains a service called Company Dossier, which collects information from numerous databases to generate a ready-made corporate profile. Among the features are:
- basic information, including business description
- executives and directors
- recent lawsuits
Larger business libraries may also provide access to financial subscription services such as S&P Capital IQ and the Bloomberg Terminal; the latter requires special hardware and thus must be used on-site.
Much of the material on corporate websites amounts to little more than company propaganda, but there is also a fair amount of useful information, especially on the sites of larger firms. Here are some of the main items to look for:
- General description and company history. Most companies include at least a basic profile of themselves (often under the heading About Us). Sometimes there will also be a history of the firm.
- Annual Report. Company websites are the only place where you can download copies of the firm’s glossy annual report, which contains information about operations, financial results, officers and directors, etc. (For old reports, see the ProQuest Historical Annual Reports database, which is available as part of the electronic resources of some university libraries.)
- Press Releases. These documents contain a high quotient of hype, but they are useful as sources of information that may never make it into the media. They serve as a primary source for official company positions and claims. In a controversy over a company’s failure to live up to a commitment (such as the creation of new jobs at a plant that received a government subsidy), it is quite effective to be able to quote from an old company press release in which the promise was made.
- Executive biographies. Many large companies post bios of upper level managers. These can often provide useful information about executives who might be your adversaries.
- Facility lists. Companies often put lists of their factories and other facilities on the website, including their location. Larger retail chains include store locators. Such information can be quite handy in planning campaign activities.
Every U.S. corporation – whether publicly traded, privately held or non-profit – must register at the state level to receive a charter to do business. The agency that handles this process is usually the state Secretary of State’s office, which will also provide public access to at least some of the information that corporations must provide in their filings.
There are several ways to obtain this information. The best is to go to the Secretary of State’s office directly, make a request and obtain hard-copy printouts of all the documents available on your target company. Along with the articles of incorporation, the materials should at least contain the exact name and mailing address of the company plus the name of its registered agent (a person or entity that is served papers when the company is sued but may not otherwise be involved in operations). In many states companies must also provide information such as the name (and sometimes home address) of each officer and director and his/her ownership of the company’s stock. These facts are especially valuable when researching small, privately-held companies that may otherwise not be required to disclose much information.
If you cannot go to the Secretary of State’s office in person, check if there is a telephone request service. In addition, more and more states are putting their corporate filings online. For a guide to which states have created sites for this or other kinds of public records, see Search Systems Public Records.
If you don’t know what state the company is located in, look for the contact information on the firm's website. If you have access to a subscription service such as LexisNexis Public Records or Westlaw, you can search nearly all states at once – either by the name of the company or the name of an officer or director (though the entries from some states do not include such names). Delaware, where many large companies are registered, can also be searched through a separate service. On LexisNexis Public Records or Westlaw you can also search fictitious names (DBA) files for the same states.
The real estate holdings of corporations, like those of individuals, are a matter of public record, usually at the county level. You will want to check the records of the Tax Assessor to see what properties are held in the company’s name, how much property tax is supposed to be paid on those properties and whether the payments have been made. You will also want to search at the office of the Recorder of Deeds to get copies of documents such as deeds, mortgages and tax liens. Note that the names of these offices will vary in different places. To find links to online data from such sources, use a service such as Search Systems Public Records.
To do a search beyond a single county, use services such as LexisNexis Public Records or PeopleMap on Westlaw. Note that these services can also search for ownership of boats and aircraft.
Since the federal government instituted an extensive system of securities oversight in the 1930s, publicly traded companies have been required to file a variety of reports with the Securities and Exchange Commission (SEC), which in turn releases most of these filings to the public at no charge. The reports, which cover financial and some operational matters, are designed to assist investors, but they also widely consulted by union researchers and other progressive activists.
Gaining access to these reports became much easier in the mid-1990s, when the SEC initiated a system called EDGAR (Electronic Data Gathering Analysis and Retrieval) under which most of the public filings are posted on the Internet. EDGAR documents are available from the SEC website itself or from various commercial sites.
For online access to SEC documents that predate the EDGAR system, try Nexis or Westlaw, which have documents going back to around 1987. Older filings can also be found on microfiche at the SEC public reading room in Washington, DC or at larger reference libraries.
There are dozens of different types of SEC filings. Here are descriptions of the key ones to check when profiling a corporation:
The 10-K is an annual report that companies file with the SEC, but it is quite different from the glossy annual report that firms use for public relations purposes. The 10-K may lack photographs and fancy graphics, but it includes a wealth of information about the company. Along with a full set of financial statements, the document includes:
- a detailed description of the company’s operations
- a summary of the firm’s competitive and regulatory climate
- a description of the company’s facilities
- basic data on the company’s workforce, which may include information on the extent to which the workers are unionized and which unions represent them
- an overview of the main legal proceedings in which the company is involved
- an account of environmental issues relating to the company’s operations
- a list of the company’s subsidiaries (in a separate appendix called Exhibit 21)
Note: A company may be privately held in that it does not have shares that trade publicly, yet it still is required to file a 10-K if it sells bonds or other debt securities to the public.
10-Q and 8-K
The 10-Q is a quarterly filing that updates the information in the 10-K. The 8-K is a filing made by the company when an extraordinary event has taken place. This would include things such as a change in top management, a takeover bid or merger plan, and the initiation of a major legal action against the company.
Proxy Statement (Form DEF 14A)
Another disclosure goldmine is the proxy statement (or simply proxy), which the SEC designates as Form DEF 14A. The primary function of the proxy is to notify shareholders when and where the company’s annual meeting will take place. It is called a proxy because the version sent to shareholders includes a card that those who do not plan to attend the meeting can send in to give management the right to vote their shares in the election of directors and any ballot measures.
Information about the annual meeting is also useful to trade unionists and other activists who may be trying to influence corporate policy. The annual meeting may be the only opportunity for you to address top management and the board of directors face to face. If you are engaged in an intensive campaign, you may want to formulate a shareholder resolution and try to get it on the ballot for the meeting. This is a complicated process that you should not undertake without consulting groups that specialize in shareholder activism (see below). If you succeed, the text of your resolution would appear in the proxy statement.
The value of the proxy statement as an information source goes beyond matters relating to the annual meeting. Here are some of the other gems it contains:
- Stock Ownership Data. The proxy will list any individual or institution that controls 5 percent or more of the company’s shares. It will also list the number of shares controlled by each director and each member of top management. This will allow you to determine, for example, how much a chief executive stands to gain personally by pursuing policies aimed at jacking up the stock price.
- Executive Compensation. Everyone talks about corporate greed. The proxy statement will show you exactly how greedy the top officers of the company are—in terms of the exorbitant compensation packages they have pressured the board to award them. The document states down to the dollar how much the five highest paid executives receive in salary, bonus, incentive pay, perks, etc. It also shows you the quantity of stock options those executives have received and how much profit they have realized by exercising the options. A reminder: a stock option is the right to purchase a certain number of a company’s shares at a specified price. When the market price rises well above the option price, the executive can make a killing by purchasing shares at what amounts to a steep discount.
- CEO Pay Ratio. Since 2018 corporations have been required to disclose the ratio between the total compensation of the chief executive officer and median employee pay.
- Director Compensation. Outside directors (i.e. those who are not members of management) used to receive nominal payment for what is typically a not very demanding part-time job. These days, large companies often reward their outside directors handsomely with cash and stock options. The proxy discloses the details.
- Director Biographies. One of the things that shareholders do at annual meetings is to elect or re-elect directors (who usually run unopposed). The proxy statement is where the candidates are listed and where their professional background is presented. These biographies include the names of any other companies where the individual serves as a director. Situations in which two companies share directors (also known as interlocks) can signify an important relationship between the firms. It is also a key fact that can be used in corporate campaigns to put pressure on parties other than the direct employer.
- Procedures for Shareholder Resolutions. The proxy will contain information on the deadline for the submission of a shareholder resolution for the following year’s annual meeting.
The Interfaith Center on Corporate Responsibility has a subscription database called EthVest that contains comprehensive information on shareholder resolutions.
Prospectus and S-1 Registration Statement
These are documents issued in connection with an initial public offering (IPO) of stock or the issuance of new stock by a company that is already public. The disclosure process begins with a preliminary prospectus (known informally as a “red herring”). This contains:
- a description of the securities to be registered
- planned use of the proceeds from the sale of the securities
- risk factors that need to be considered by potential investors
- names of the parties selling shares to the public
- company advisers and their financial interest in the deal
The S-1 Registration Statement contains a detailed account of the company’s history, operations and financial record. It is similar to a 10-K, but it contains more detail.
Forms 3 and 4
These filings are the means by which company insiders (officers and directors) report sales or purchases of the firm’s stock. The SEC requires these reports so that investors are aware of personal transactions that may reflect the insiders’ assessment of the company’s prospects. Form 3 is an initial filing and Form 4 reflects changes in the holding.
Canada is one of the only other countries with a openly accessible public-company disclosure system comparable to that of the United States. Its program is called SEDAR (System for Electronic Data Analysis and Retrieval). The Canadian filings have different names from those in EDGAR, but the content is similar. For example, the counterpart to the 10-K is the Annual Information Form and the counterpart to the proxy statement is the Management Information Circular.
Dun & Bradstreet (D&B) is one of the leading credit-rating companies; i.e., it collects information on how promptly firms pay their bills and sells this information to other companies that want to determine how risky it is to extend credit to a commercial customer. In the course of assembling this payment data, D&B also collects a great deal of descriptive information on millions of U.S. and foreign companies, including ones that are privately held and ones that are tiny in size. D&B is thus an invaluable source of information on companies that do not file with the SEC. Keep in mind, however, that there is no legal penalty for lying to D&B (as there is with the SEC), so the information in its databases cannot be regarded as authoritative. It is, however, often the only source of descriptive information (beyond what is in state corporate filings) for small, private firms.
Many unions and other organizations subscribe to D&B’s services. If you do not have such access, you can purchase individual reports on the Internet (using a credit card) at this site. These typically include:
- line of business and scope of operations
- estimate of annual revenues
- number of employees
- brief history of the company
- names and brief biographies of officers and directors
- names of subsidiaries or parent company
Note: D&B databases with some of this information can be found on Nexis and Westlaw. For example, Nexis has D&B's Duns Private Company Insight database, which covers the 250,000 largest firms. D&B also publishes the Million Dollar Directory, which can be found in business libraries.
Other sources of information on privately held companies include the subscription services Mergent Intellect (which draws from D&B and other sources), Orbis, PrivCo, FactSet and Ward's Business Directory of U.S. Private and Public Companies, which can be found on the Gale Directory Library online service. Forbes publishes an annual list of the largest privately held firms.
In researching portfolio companies of private equity firms, keep in mind that they are often partly publicly traded and thus are required to file reports with the SEC. Specialized databases on private equity, which may be available from larger business libraries, include Pitchbook and Preqin.
Also note that data from regulatory agencies such as the Environmental Protection Agency and the Occupational Safety and Health Administration cover private as well as publicly traded companies.
Newspaper and magazine articles may be secondary sources, but they often contain company information found nowhere else. This is especially so with specialized trade journals and newspapers in cities where a company has its headquarters or a major facility.
Searching for news articles used to a cumbersome process of paging through hefty printed indexes and then retrieving the actual texts from bound volumes or microfilm. Thanks to the creation of digital archives, it is now possible to search for articles via your computer. Many publications have set up websites with an archive of back issues. To locate the website of a print publication, try NewsLink, which is arranged by subject and by geography. Look here for a directory of newspaper archives. Be sure to check how far back an archive goes; many newspapers make available articles for only a limited period of time.
For searching recent events Google News may be adequate, but for broader searches, use one of the databases that collect the full text of articles from many publications. The best of these is Nexis, which brings together articles – in some cases going back 20 years or more – from thousands of newspapers, magazines, trade journals, wire services and press release services. Nexis can be expensive, but it is possible to arrange for reasonably priced flat-rate subscriptions for small organizations. It may also be possible to gain access through a public or academic library.
The other leading source of full-text articles is Factiva, which is available via public or academic libraries. Among other things, it contains an online archive of the Wall Street Journal. Some libraries also have a stand-alone service containing the Journal's archive back to 1984. Also try NewsLibrary, which includes some newspapers not covered in Nexis or Factiva and in some cases has coverage going back farther than those services.
For older magazine articles, use the Business Periodicals Index Retrospective: 1913:1982, a database produced by EBSCO and available at some libraries. To include more specialized and academic publications in your search, try Business Source Premier, another EBSCO database available from libraries.
The web has numerous sites where investors (and sometimes company insiders) can share information (or rumors) with one another, or simply mouth off about the company. These postings cannot be regarded as authoritative, but sometimes they contain valuable leads that you can then research using more reliable sources. See, for example, Investors Hangout. Also be sure to search on Twitter using the company name as a hashtag.
Updated December 13, 2019